are stocks still dropping: market update

Are stocks still dropping?

Short summary: This article examines whether stocks are still dropping, why recent declines happened, how major indexes and sectors behaved, what indicators to watch next, and what practical steps investors can take. It synthesizes market coverage from major outlets and measurable indicators through mid‑January 2026. As of Jan 13, 2026, according to Investopedia and other market coverage, market direction remains data‑dependent and volatile — read on for a timeline, drivers, index and sector details, indicators to watch, and practical guidance for different time horizons.

Note: This piece is informational and neutral in tone. It is not personalized investment advice. For exchange services and Web3 wallet needs, consider Bitget and Bitget Wallet for trading and custody features.

Recent market context and timeline

Are stocks still dropping? The short factual answer is: not uniformly. The market moved through a period of concentrated leadership and rotation that produced sharp pullbacks, volatile intraday swings and pockets of rebound from mid‑November 2025 through January 2026. Below is a concise timeline of the key moves and headline drivers as reported by mainstream market coverage.

• Mid‑November 2025: A rotation began away from the biggest AI and large‑cap technology leaders after outsized gains earlier in 2025. Several days of heavy selling in growth and AI‑exposed names produced notable single‑day index declines and increased volatility. Multiple outlets including CNBC and MarketWatch reported profit‑taking and rotation flows as the immediate cause.

• Late November – Early December 2025: Markets staged intermittent rebounds. Headlines flagged mixed earnings results and evolving Fed expectations as CPI and other macro prints approached. CNN and MarketWatch recaps show sessions with large swings tied to sentiment around rate‑cut timing.

• Dec 10–15, 2025: Several major sessions produced sharper drops and then partial recoveries as investors reacted to CPI/PPI releases, high‑profile corporate earnings and guidance, and portfolio reallocations. MarketWatch live coverage (Dec. 15, 2025) emphasized daily breadth weakness even when headline indexes recovered.

• Early January 2026: The calendar opened with choppy trading. Crypto and equities showed correlated risk‑on/risk‑off moves. As of Jan 9, 2026, CoinoMedia and crypto market trackers noted a short‑lived crypto bounce but a return to “Fear” on the Fear & Greed Index, signaling persistent caution.

• Jan 9–13, 2026: The U.S. December jobs report (nonfarm payrolls +50,000; unemployment 4.4%) published in early January led to rapid re‑pricing of Fed rate‑cut expectations. As of Jan 13, 2026, Investopedia noted markets reacted to the weaker‑than‑expected payroll gain paired with a surprise dip in unemployment, which complicated the rate‑cut outlook. Market swings intensified around those data points and concurrent large bank and tech earnings coverage.

Throughout this period, coverage from CNBC, MarketWatch, CNN and the Associated Press recorded alternating sessions where headline indexes fell significantly and other sessions where indexes rebounded — producing an overall environment of elevated intraday volatility rather than a simple continuous decline.

Primary drivers of the declines

Understanding "are stocks still dropping" requires looking at the fundamental drivers. The recent declines stem from several overlapping forces that affected risk appetite, liquidity, and market breadth.

Monetary policy and Fed expectations

Shifts in expectations about Federal Reserve policy have been central. Traders use CME Group FedWatch and similar tools to price the likelihood and timing of rate cuts. When data (such as unemployment or inflation prints) suggested slower disinflation or stronger labor conditions, markets reduced the probability of near‑term cuts. That re‑pricing raises real discount rates and reduces present values for long‑duration assets (growth and AI names), pressuring equity valuations.

As of Jan 13, 2026, Fed‑watchers and sell‑side notes—summarized in Investopedia and CNBC coverage—indicated that the stronger‑than‑expected fall in unemployment lowered the odds of a January cut and pushed some traders to be more cautious. This dynamic amplified selling pressure in indices sensitive to rate expectations.

Inflation data (CPI/PPI) and economic releases

Inflation prints shape expectations for policy and real yields. Over the December–January window, several CPI and PPI releases produced mixed signals: some measures showed stickier components while headline figures calmed in places. Market responses were swift: hotter inflation threatened earlier cuts, weighing on rate‑sensitive stocks; softer prints supported rallies.

Media coverage repeatedly tied major down days to surprising inflation strength or to the market revising its discounting of future rate cuts. Investors continued to watch sequential CPI/PPI releases and monthly employment reports as primary inputs.

Earnings and sector rotation (especially tech/AI)

A concentrated leadership in AI and a small number of mega‑cap tech names drove much of the S&P 500’s gains in 2025. By mid‑November, profit‑taking in high‑flyers — sometimes after strong earnings but cautious guidance — triggered sector‑wide weakness. Quarterly results and forward guidance that failed to meet sky‑high expectations prompted selling across semiconductors and AI software suppliers.

Example company headlines cited in market coverage included broad weakness in AI leaders and memory/chip suppliers (names such as Nvidia and Broadcom were often singled out in mainstream reporting for volatility). When a few large names pull back, market capitalization‑weighted indexes like the S&P 500 and Nasdaq can see outsized moves. That concentrated exposure amplifies corrections.

Geopolitical/fiscal and event risk (including government shutdown effects)

Event risks — including a prolonged government shutdown and legal or regulatory events — added uncertainty. As of early January 2026, news outlets reported that a high‑profile legal/tariff case timing (Supreme Court action expectations) and the prior federal government shutdown had dampened certain labor metrics and added headline risk. Markets typically react to uncertainty by repricing risk premia and sometimes reducing liquidity; the effect is an increase in intraday volatility and occasional risk‑off flows.

Market structure and sentiment (volatility, breadth, flows)

Market structure factors magnified moves. VIX spikes, ETF flows, and daily breadth data told a consistent story: when implied volatility rose, many leveraged or momentum strategies de‑risked, causing quick declines. ETF outflows from risk products (equity and crypto ETFs at times) were reported in the period and contributed to selling pressure.

Sentiment indicators — e.g., the Fear & Greed Index — moved into Fear territory at points in January, reflecting faster outflows and cautious positioning. Liquidity in some large names thinned intraday, creating larger apparent swings on order flow.

How major indexes have performed

Below is a concise look at index behavior during the November–January window and through early‑to‑mid January 2026.

Dow Jones Industrial Average

The Dow — driven by 30 large, often value‑oriented industrials and financials — recorded several several‑hundred‑point swings. Reports across MarketWatch and other outlets recorded multiple sessions with 300–500 point moves in December and January. The Dow’s composition (more weight to cyclical and value categories versus tech) meant it sometimes outperformed on rotation days and underperformed on days when mega‑cap tech gains offset other weakness.

S&P 500

The S&P 500 experienced episodes of retreat after record‑high prints and then partial recoveries. As of mid‑January coverage (Investopedia, Jan 13, 2026), the S&P had traded off stale intraday peaks and faced pullbacks when the market repriced Fed cuts. Weekly performance varied: some weeks closed modestly negative, others recovered, so the short‑term trend was choppy rather than a persistent downtrend.

Nasdaq Composite

The Nasdaq — tech‑heavy — was the most sensitive to the AI/tech rotation. Larger intraday declines occurred here because concentrated leadership in a handful of mega‑caps and semiconductor names drove index moves. When investors rotated into value or reduced duration exposure, the Nasdaq saw larger percentage drops than the broader market.

Russell 2000 / small caps

Small caps (Russell 2000) showed relative underperformance during the risk‑off episodes, reflecting weaker growth expectations and sensitivity to domestic economic headwinds and liquidity. In some rebounds, small caps lagged large‑cap value as flows favored perceived safety. MarketWatch and CNBC live coverage documented bouts of underperformance and occasional catch‑ups when cyclical data improved.

Sector and notable stock effects

Sectors diverged markedly:

• Technology (especially AI exposure): Leaders in AI and semiconductors were most volatile and led many of the declines when sentiment shifted. Reports during December and January referenced outsized moves in companies that had led the 2025 rally.

• Communications/Consumer Discretionary: These sectors moved with the technology complex and were sensitive to changes in growth expectations.

• Energy: Energy tended to outperform at times, benefiting from higher oil prices tied to geopolitical headlines and commodity dynamics. Coverage noted energy strength on days when oil rose, helping to offset index weakness.

• Financials: Some financials outperformed on a rising yield backdrop, while others lagged on recession fears or credit‑sensitivity. Banking earnings days produced mixed stock reactions depending on interest‑rate sensitivity.

Notable company‑level mentions in coverage included major semiconductor and AI infrastructure suppliers, payment processors and large banks. These firm‑level results and guidance often drove sector rotations on earnings days.

Market indicators and data to watch going forward

If you’re asking "are stocks still dropping" for decision purposes, monitor these indicators and data releases closely — they are the primary inputs market participants use to update positions.

• CPI and PPI monthly releases (inflation trend and core measures)
• Nonfarm payrolls, unemployment rate, and wage growth (labor market strength)
• Federal Reserve communications, meeting calendar and CME FedWatch probabilities
• S&P 500 index breadth (ratio of advancing vs declining issues) and sector breadth
• VIX and term‑structure of implied volatility across equities
• 10‑year Treasury yield and real yields (inflation‑adjusted yields)
• ETF flows (equity and fixed income ETFs), mutual fund flows
• Corporate earnings and forward guidance cadence (especially megacaps)
• Macro headlines: trade/legal rulings timing, government fiscal events, and geopolitical developments that affect commodities and risk sentiment
• Cross‑asset signals: USD strength, commodity prices (oil, copper), and crypto as a risk appetite proxy (Bitcoin/ETH price and ETF flows)

As of Jan 9–13, 2026, crypto market trackers reported sharper ETF outflows for BTC and ETH and increased liquidations, underscoring how fast institutional flows can shift correlated risk dynamics.

Short‑term vs. medium/long‑term outlook scenarios

Below are neutral, conditional scenarios that help frame potential market paths. These are scenario sketches — use them as frameworks for monitoring rather than predictions.

1. Continued pullback scenario

• Trigger: Inflation remains sticky or labor market shows surprising strength, pushing out expected Fed cuts and keeping yields elevated.
• Market behavior: Growth/AI leadership weakens further, breadth deteriorates, volatility stays high, and small caps underperform. Risk assets retrace a larger portion of prior gains.

1. Stabilization / rebound scenario

• Trigger: Sequential data shows easing inflation and cooler job gains; Fed‑cut expectations re‑enter the pricing horizon.
• Market behavior: Yields decline, VIX falls, breadth improves, and rotation back into growth/AI resumes alongside value/cyclicals. Indexes recover with potential fresh highs for broad indices.

1. Rotating market scenario

• Trigger: Macro data is mixed, but corporate earnings for cyclical/value sectors surprise positively, while some tech names consolidate.
• Market behavior: Leadership shifts from growth/AI into value, energy and selected financials. Broad participation improves slowly; overall market rangebound with sector leadership changes.

Each scenario has measurable triggers (CPI prints above/below consensus, NFP beats/misses, 10‑yr yield moves beyond psychological levels, VIX directional changes). Track those to assess which scenario is active.

What investors can do (practical guidance, not investment advice)

Below are neutral, practical steps investors commonly consider in volatile periods. This is educational, not personalized financial advice.

• Reconfirm your time horizon and risk tolerance before making large moves. Short‑term volatility is normal; long‑term goals often require discipline.

• Avoid panic selling. Historically, selling at the lows can lock in losses and miss rebounds. Review portfolio allocation rather than reacting to daily headlines.

• Rebalance to target allocations if positions are meaningfully overweight or underweight relative to your plan. Rebalancing can be a disciplined way to buy dips.

• Consider dollar‑cost averaging for new contributions rather than lump‑sum market timing.

• Use diversification across asset classes and sectors to reduce concentration risk. Consider using regulated platforms such as Bitget for spot and derivatives exposure (as appropriate for your risk profile) and Bitget Wallet for custody needs.

• If you use hedging (options, inverse strategies), ensure you understand costs, margin and potential losses. Hedging can protect downside but carries explicit costs.

• Track the indicators listed above (rates, CPI, payrolls, earnings cadence). Build a simple checklist of triggers that would prompt portfolio changes.

• Consult a licensed financial advisor for decisions tied to retirement, taxes, or complex strategies.

Historical precedents and context

Rotations and pullbacks tied to policy expectations and concentrated leadership are common. Examples from past cycles show two patterns:

• Corrections driven by valuation re‑rating (especially concentrated in few names) often lead to volatility and sector leadership shifts. Markets later stabilize when either leadership resumes or breadth expands.

• Macro‑driven corrections (inflation, policy surprise) can deepen until macro data shows a convincing trend. When policy expectations re‑align with data, risk appetite typically recovers.

Both patterns are visible in the current episode: concentrated gains in AI/tech amplified downside when sentiment shifted, and evolving policy expectations and macro prints (jobs, CPI) have determined the pace of recoveries.

Frequently asked questions (short answers)

Q: Are stocks still dropping today? A: Market direction is data‑dependent and can change intraday; check live quotes and the latest headlines from reputable sources. As of Jan 13, 2026, markets were volatile with mixed session outcomes.

Q: Will the pullback continue? A: It depends mainly on inflation and Fed policy path, upcoming jobs and CPI/PPI prints, corporate earnings, and investor sentiment. Both continuation and quick rebounds are possible depending on data surprises.

Q: Should I sell or buy now? A: Decisions should follow your investment plan, time horizon, and risk tolerance. Consider rebalancing, dollar‑cost averaging, or consulting a licensed financial advisor rather than acting on headlines alone.

Q: What signals would indicate the decline is over? A: Watch for sustained improvement in breadth (more advancing issues), a falling VIX, easing bond yields, and macro data that supports a path toward easier policy — collectively these suggest a lower probability of further large declines.

References and primary sources

• Investopedia — "Markets News," Jan. 13, 2026 (coverage of market reaction to CPI, jobs and bank earnings). As of Jan 13, 2026, Investopedia summarized how macro prints affected Fed pricing.

• CNN Business — coverage of Fed expectations and notable single‑day index moves, Nov. 13, 2025. As of Nov 13, 2025, CNN reported market moves tied to shifting expectations for rate cuts.

• MarketWatch — live coverage and daily recaps, Dec. 15, 2025 and Nov. 13, 2025 (recaps of declines, rotations and headline drivers). As of Dec 15, 2025, MarketWatch documented rotation away from tech leaders after earnings.

• CNBC — market updates and sector rotation analysis (Nov.–Dec. 2025). CNBC provided ongoing sector‑level context for investor flows and earnings reaction.

• Associated Press — market stories Dec. 10–12, 2025 (contextual reporting on market swings and labor/economic data). AP articles tracked headline developments that influenced trading.

• Reuters — reporting on legal/tariff case timing and market responses (select dates in Dec. 2025 and Jan. 2026). As reported by Reuters, a pending high‑profile ruling influenced near‑term headline risk.

• The Telegraph / Financial Times / Benzinga / CoinoMedia — coverage and rolling live blogs that provided granular intraday updates on jobs, unemployment (50,000 NFP; unemployment 4.4%), oil and commodity moves, and crypto flows. Specific data points included the December nonfarm payrolls print (+50,000) and a decline in the unemployment rate to 4.4% (Labor Department), both reported in early January 2026.

• Crypto market trackers (Jan. 9–13, 2026) — CoinoMedia and Benzinga summaries: BTC near ~$90k, ETH near ~$3,100, ETF inflows/outflows and liquidations/market cap changes. As of Jan 9, 2026, CoinoMedia and other trackers reported a return to "Fear" on sentiment indexes and notable ETF outflows for BTC/ETH products.

Note: For live confirmation of current market status, check real‑time quotes, CME FedWatch probabilities, and the latest official releases (CPI, PPI, nonfarm payrolls) published by government agencies and leading financial news outlets.

Further reading and next steps

If you want to monitor markets effectively:

• Add a shortlist of the upcoming macro releases (CPI, PPI, NFP) to your calendar.
• Track 10‑year Treasury yields and the VIX daily.
• Follow earnings dates for the largest market‑cap companies in sectors you hold.
• For crypto‑equity correlation signals and custody/trading, consider Bitget and Bitget Wallet as regulated and feature‑rich options for spot trading, derivatives access and secure wallet custody.

Explore more market insights and Bitget tools to help you stay informed and execute strategies consistent with your goals.

Further exploration: keep this checklist handy — macro release date, Fed statement dates, major earnings, and weekly breadth score — and update it each week to answer the recurring question: are stocks still dropping?